Deck 5: Business Information and Conflict of Interest

Question 1

If a company gains information on a company through misrepresentation,this is a breach of .

A)property
B)honesty
C)trust
D)privacy

Answer 1

B

Question 2

Conflicts of interest are an ethical problem for a business because they .

A)violate an individual's right to privacy
B)create profits that would be owed to other companies instead
C)create incentive for company representatives to act against others' best interest
D)prevent the company from succeeding as well as it might otherwise

Answer 2

C

Question 3

The Wexler case found that Greenberg had the right to his own formulas because .

A)it would be unfair for his old company to use those formulas
B)his new company did not own the rights to the formulas
C)no one owned the rights to the formulas that Greenberg had created
D)not allowing him to do so would unfairly restrict his ability to compete with the new company

Answer 3

D

Question 4

Arthur Andersen's double role with Enron represented a conflict of interest because .

A)Arthur Andersen made too much of a profit from one client
B)Enron executives did not reveal everything to Arthur Andersen that they should have
C)Arthur Andersen had incentive not to make criticisms that would hurt its consultingrole
D)Arthur Andersen did not know Enron well enough to be both consulting and auditing the company

Question 5

The Economic Espionage Act of 1996 .

A)was primarily aimed at protecting against domestic spying
B)was primarily aimed at protecting foreign companies in the U.S.
C)has been effective in protecting against domestic spying
D)was the first law in the U.S.to protect trade secrets

Question 6

The question of intellectual property ownership becomes most complicated when .

A)the intellectual property involves new technology
B)an inventor works for a company that manufactures the invention
C)the intellectual property is not related to work performed for the employer
D)the inventor owns the right to many different patents

Question 7

One source of the idea that trade secrets are a form of property is the view that .

A)trade should always be free and unrestricted
B)each person owns the product of his/her labor
C)property should be had in common by all people
D)companies should be able to make a profit however they can

Question 8

Courts have difficulty determining .

A)what constitutes a trade secret
B)whether trade secrets should be protected
C)why companies want to protect trade secrets
D)the extent to which trade secrets have been pursued

Question 9

Trade-secret protection agreements that are based on confidentiality assume that .

A)the trade secret was not developed by the employee
B)the employee will not work for other companies
C)the employer is involved in a high-tech industry
D)the employee will eventually work for a competitor

Question 10

Why are legal restrictions placed on noncompetition agreements?

A)Most employees stay with the same company for a long time.
B)Most employees are not in a position to use trade secrets with another company
C)They are difficult to enforce.
D)They can result in difficulty for an employee to subsequently find suitable work.